Kelly v Richard Girasole, P.C.

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Kelly v Richard Girasole, P.C. 2012 NY Slip Op 33058(U) December 7, 2012 Supreme Court, New York County Docket Number: 400937/2010 Judge: Lucy Billings Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. SCANNED ON 1212612012 [* 1] . r SUPREME COURT OF THE STATE OF NEW YORK LUCY BBLLEMGs PRESENT: J.S.C. - NEW YORK COUNTY PART 44 Justice INDEX NO. Index Number : 400937/2010 KELLY, PATRICK vs. RICHARD GIRASOLE, CPA SEQUENCE NUMBER : 002 MOTION DATE MOTION SEQ. NO. MOTION CAL. NO. DISMISS - . The following papers, numbered I to qj were read on this motion t o / P &Wss W /LnKpw.C PAPERS NUMBERED Notice of Motion/ Order to Show Cause - Affidavits - Exhibits ... 1-2. 3 Answering Affidavits - Exhibits Replying Affidavits . 0 Yes Cross-Motion: 4 . No Upon the foregoing papers, it is ordered that.-: FILED i DEC 2 6 2012 NEW YORK COUNIY CLERKS O F F I E Dated: 'i ' 12 17 /IL LJ CY B6 &hi G s B ?4 0 FINAL DISPOSITION d Check if appropriate: 0 DONOTPOST Check one: c NO J. S. C. [* 2] PATRICK KELLY, Index No. 400937/2010 Plaintiff - against - DECISION AND ORDER RICHARD GIRASOLE, P.C . , Defendant ________--------- LUCY BILLINGS, J.S . C . : In this acti.on for accounting contract, p l a i n t i.ff retained defendant to negotl income tax liabilities. i' Plaintiff claims that defendknt's f's accounting services w e r e negligent because defendant failed to show the United States Department of the Treasury Internal Revenue Service (IRS) that plaintiff's 1984-86 liabilities were discharged in his bankruptcy proceeding. As a result, plaintiff paid an amount in settlement that actually had been discharged. Defendant accountant moves to dismiss each of plaintiff's claims based on documentary evidence that defendant rendered the accounting services according to the parties' agreement and according to accepted professional standards. C.P.L.R. § 3211(a) (1). I* FACTUAL ALLEGATIONS In sum, the complaint alleges that, before plaintiff retained defendant to resolve plaintiff's tax liabilities, a bankruptcy proceeding discharged his debts, which defendant then keLLy. 142 1 [* 3] neglected to account for in negotiating plaintiff's tax liabilities with the IRS for the years before the discharge. Specifically, plaintiff filed his bankruptcy petition February 13, 1990. On August 16, 1995, the United States Bankruptcy Court of the District of Connecticut discharged plaintiff's debts. Plaintiff first retained defendant to perform accounting services in 1998. After the IRS notified plaintiff of his federal income tax liabilities for 1984, 1985, and 1 9 8 6 , totalling $201,098.90, he retained defendant to resolve those tax liabilities. Plaintiff alleges this notice and agreement with defendant occurred in 2002. Defendant alleges that the IRS issued an Official Assessment of Income Tax Liability in September 1999, but neither party presents any such document. In February 2003, the IRS granted an application by defendant on behalf of plaintiff's former wife releasing her from that federal tax liability. In December 2004, defendant negotiated a settlement of plaintiff's federal income tax liabilities for 1984-86, reducing them t o $26,226.56, which plaintiff paid, along with $6,000.00 to defendant f o r its services. In May 2011, after plaintiff inquired about a refund from the I R S because he had p a i d debts that were discharged, the federal Taxpayer Advocate Service, an office independent of the IRS, notified him that: After careful review and consultation with our technical staff, your bankruptcy was discharged prior to IRS additional assessment, September 1999. As a result, taxes would not have been discharged because they had not been kelly . 1 4 2 2 [* 4] properly assessed before the bankruptcy. Aff. of Richard Girasole Ex. A . 11. THE LACK OF ADMISSIBLE DOCUMENTARY EVIDENCE BEARING ON THE PARTIES' CLAIMS While plaintiff does not dispute that he received this notice from the Taxpayer Advocate Service in 2011, the notice's contents are multi-layered hearsay. Therefore defendant may not rely on t h o s e contents as its documentary evidence that plaintiff's 1984-86 tax liabilities were not discharged and that, consequently, defendant did not fail to account for such a discharge in negotiating a settlement for plaintiff. C.P.L.R. § 3211(a) (1); Greenapple v. Capital One, N . A . , 92 A.D.3d 5 4 8 , 550 (1st Dep't 2012); Advanced Global Tech., LLC v. Sirius Satellite Radio, Inc., 44 A . D . 3 d 317, 318 (1st Dep't 2 0 0 7 ) ; Wriqht v. C . H . Martin of White Plains Rd., Inc,, 23 A . D . 3 d 295, 296 (1st Dep't 2005); Richbell Info. Servs. v. Jupiter Partners, 309 A.D.2d 288, 297 (1st Dep't 2003).. See 511 W. 232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144, 1 5 2 - 5 3 (2002); Leon v. Martinez, 84 N.Y.2d 83, 87-88 (1994); Rivietz v. Wolohoiian, 38 A . D . 3 d 301 (1st Dep't 2007); Hicksville Dry Cleaners, I n c . v. Stanley Fasteninq Sys., L.P., 37 A . D . 3 d 218 (1st Dep't 2007). Even if the I R S in September 1999 did issue an Official Assessment of Income Tax Liability owed by plaintiff f o r 1984-86, no admissible evidence offered by defendant shows that this "additional assessment" was t h e IRS's first assessment for those years. Girasole Aff. Ex. A . Plaintiff presents correspondence dated November 30, 1993, from his attorney in the bankruptcy kelly . 1 4 2 3 [* 5] I proceeding to the IRS, albeit also inadmissible, referring to an IRS notice of November 23, 1993, that "continues to seek payment" of plaintiff's 1985 income tax indebtedness, and informing the I R S of this debt's dischargeability. B. A f f . of Patrick Kelly Ex. Plaintiff also presents the list of creditors whose claims were discharged in his bankruptcy proceeding, which includes the IRS, but does not specify what debts to that creditor were discharged. Defendant, on the other hand, which bears the burden in the context of defendant's motion, presents no admissible evidence that plaintiff's 1984, 1985, or 1986 income tax indebtedness was not dischargeable. Defendant claims that plaintiff's federal income tax liability failed to meet the criteria for dischargeability: that, for example, his tax returns f o r 1984-86 were truthful and filed at least two years before his bankruptcy petition February 13, 1990, and t h e I R S issued an assessment of his tax liability at least 240 days before his bankruptcy petition. 11 U.S.C. 5 5 507 and 523. Yet defendant presents no documentary evidence to this effect other than the inadmissible Taxpayer Advocate Service notice indicating that the IRS did not issue an assessment of plaintiff's tax liability until years after his bankruptcy petition. Defendant claims that it successfully performed the services f o r which plaintiff retained it by reducing his federal tax liability to approximately 12.5% of the original amount and by securing t h e release of plaintiff's former wife from any k e l l y .142 4 [* 6] liability. Plaintiff maintains not only t h a t his federal tax liability had been discharged, but also that he retained defendant to negotiate his New York State tax liability during the same period, a service defendant neglected entirely. As a result, plaintiff secured a cancellation of h i s 1986 $23,674.41 income tax liability on his own: one of t h e tasks he had paid defendant to accomplish, In fact, defendant s further documentary evidence, a New York State Department of Taxation and Finance (NYSDTF) Tax Warrant issued to plaintiff dated January 25, 2003, and a NYSDTF Response to Taxpayer Inquiry dated December 6, 2010, reporting the cancellation of that 1986 income tax assessment, only corroborate plaintiff s claim in this regard. 111. CONCLUSION Defendant s inadmissible documentary evidence thus f a i l s to resolve the factual issues raised by plaintiff s allegations in his complaint and his affidavit opposing defendant s motion, to contradict his claims conclusively, Kram Knarf, LLC v. Dionovic, 74 A.D.3d 628 (1st Dep t 2010); Orbimed Advisors, LLC v. OVT Fund LP, 72 A.D.3d 521, 522-23 (1st Dep t 2010); Arfa v. Zamir, 55 A . D . 3 d 508, 5 0 9 (1st Dep t 2008); Sprunq v. Command Sec. Corp., 38 A.D.3d 478, 479 (1st Dep t 20071, and to establish a defense as a matter of law. C.P.L.R. § 3211(a) (1); Goshen v, Mutual Life Ins. Co. of N.Y., 98 N.Y.2d 314, 326 (2002); Correa v. OrientExpress Hotels. Inc., 84 A.D.3d 6 5 (1st Dep t 2011); McCully v. Jersey Partners, I n c . , 60 A.D.3d 562 (1st Dep t 2009); Foster v. kelly .142 5 [* 7] v. Kovner, 44 A . D . 3 d 23, 28 (1st Dep't 2007). Therefore the court d e n i e s defendant's motion t o dismiss this action. This The court will mail decision constitutes t h e court,s o r d e r . copies to t h e parties' attorneys. DATED: December 7 , 2 0 1 2 Lqml{+--V LUCY DEC 26 2op kelly.1 4 2 6 BILLINGS, J.S.C.

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